Jack the Pipper

Oh the Canadian dollar! John Ross and I usually say: “They don’t call it the Loonie for nothing!” And at times, after playing a setup in the Loonie where we felt some degree of confidence, and got crushed still, we add another moniker–Currency Assured Destruction. I share this with you as a type of disclaimer, so to speak.

The Fed’s announcement that it will start buying Treasury bonds, along with everyone else in the world it seems, pushes the Fed into official Quantitative Easing (QE) territory.

Our attention turns towards the latest economic data from China. Yes, because it fits our fundamental story but also because the ramifications reach far and wide.

As every trader with some longevity knows the first question you should ask the moment a trade is made is this: Where am I wrong? And that question needs to be repeated hundreds of times in your head throughout the trade in order to stay open to new information; that’s because your objectivity will always be ever so slightly tilted toward your current position.

Yesterday looked like another day foreshadowing a decent dollar correction on the bounce higher in stocks. This morning we wake to a stronger dollar again….hmmm…and of course “new” concerns about stocks, one story we saw read.

I received an email from a reader that contained an interesting fact: Seven separate assets currently maintain an 85% correlation (or better) with the S&P 500 over the last six months.

Last week I touched on the potential end to the sideways US dollar correction. Then all of a sudden some unidentified reckless group came in to buy stocks and keep them from finishing at lows not seen since 2003.

1) Still overvalued on a Purchasing Power Parity basis against the dollar 2) Interest rate differential to shrink as ECB catches up to the Fed…..

ZERO INTEREST RATE POLICY (ZIRP) seems to be in the works amongst a whole host of central banks we know and love. But haven’t we seen this movie before? And doesn’t it end badly?

Jack’s been running around speaking at various currency tours and seminars this year. And there’s one line he likes to use when conveying the uncertainty of trading in any market …